September 20, 2019 at 8:35AM
Leasing Vs Buying a Used Car
Planning to buy or lease a used car can be a difficult decision. You should start by getting a car history report from credible agencies like REVS Check. The car history report provides you information on financial encumbrance, written-off status, odometer readings, stolen status, etc. of the used car which you want to buy or lease. You can get the car history report by providing the VIN number or registration number of the car and paying a nominal fee. The current article provides insights into the pros and cons of leasing and buying a used car.
What is Leasing?
Leasing is an arrangement where your financer, which is usually the bank, buys the car and leases it to you for a fixed time period with clearly defined terms. You will have to pay a monthly fee for leasing the car. It is best for people who want to invest minimally on acquiring a car.
Pros and Cons of Car Leasing
The biggest benefit and the reason which attracts people towards leasing a used car is the minimal upfront investment. Leasing a car costs only a fraction of what it will cost to buy the same car. Leasing a car is the perfect option if you have an unpredictable cash flow. Small businesses which have irregular cash flow can benefit by leasing used cars instead of buying one. You also don’t have any obligation to buy the car after the end of the lease period. Leasing also provides you the latest car models and warranty at much cheaper prices. You also don’t have to worry about selling the car at the end of the lease tenure.
The drawback of leasing a car is though it may feel cheaper initially, you end up paying a considerable sum over a long time period without realizing it. The payment may also outrun the actual cost of buying that car. You also don’t get the car at the end of the lease tenure and hence there is no asset to show after paying a considerable sum of money. There are restrictions on how much you can drive your car in lease agreement.
Pros and Cons of Buying a Car
The most distinct advantage of buying a car is that you own it. The purchased car can be used as an mortgage against future loans which you may plan to take. You can also modify and customize the car according to your preferences. There are no limitations on how much you can drive the car if you buy it. You can also sell the car if you feel the need to upgrade to a better car.
The cons of buying a car is that it is costlier compared to leasing. The post-warranty period repair and maintenance costs can also be high while buying a car. You will be solely responsible for selling the car if you want to buy a new car. Selling a used car can be a hassle sometimes. Another major drawback of buying a car is that it depreciates quickly and you will have to take the hit due to it.
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